Human Capital

Today is Labor Day in the US. It is a day to celebrate labor, the union movement, and the role of the worker in our economy and our society.

I have always struggled with the idea that labor and capital are intrinsically opposed to each other.

It is obvious that workers have been taken advantage of by employers since the dawn of an industrialized society and possibly/probably for much longer than that.

But does it have to be that way?

In the tech sector, we typically issue between 15% and 25% of the company’s stock to the employees and we keep granting this equity as the company grows and expands.

And it is also the case that the tech sector is largely a non-unionized industry.

There are large portions of a tech company’s workforce that are in short supply, most notably software engineers and other technical positions where demand outstrips supply and has for as long as I have been working in this sector.

So there are things about the tech sector that are different from other large industries and I’ve always felt that human capital (as we like to call the people in the tech sector) is more valued in tech companies than traditional industries.

But when a tech company stumbles and starts bleeding cash, one of the first things to go is headcount.

Capital demands that a company have a profitable outlook or it will not flow to a company.

So there are fundamental economic realities that put capital and labor in opposition to each other at times.

But both capital and labor want sustainable companies that grow and prosper.

So it can be the case that labor and capital work together and succeed together.

And that has largely been the case in my career in the tech sector and I enjoy that feeling of shared success.